Litigation Skill Combined With 35 Years Of Business Experience

How mediation can benefit businesses embroiled in disputes

On Behalf of | Apr 10, 2024 | Business Law

Business disputes can arise due to contract breaches or improper business practices. Those involved in a business dispute often turn to litigation to resolve their conflict. Taking an issue to civil court leads to review by an impartial judge who can interpret a contract and any applicable laws to determine what is appropriate given the circumstances.

Sometimes, one of the parties involved in the business dispute might suggest addressing the matter via mediation. Why would representatives from a company rely on mediation to resolve a disagreement instead of taking the matter to court?

Settling is often cost-effective

Business lawsuits can take a year or longer to litigate in some cases. The complexity of the case and the current volume of lawsuits demanding time in the civil courts influence how long it takes to resolve a business dispute in civil court.

The lawsuit might disrupt business operations and can generate thousands of dollars in court costs and other litigation expenses. Even when a business is not the party to blame for the conflict, it might ultimately prove more cost-effective to settle the matter than to take it to court in pursuit of indication. Mediation allows businesses to settle an issue that might otherwise prove difficult to resolve outside of court.

Mediation can preserve relationships

One company taking another organization to court typically has a chilling effect on the business relationship between those companies. However, if the organizations can eventually settle the matter through mediation, it may be more likely for them to continue doing business with each other in the future.

Mediation provides not just an opportunity to resolve the issue but also for each party to discuss the matter in a way that can benefit the relationship between the businesses in the future. There are a host of other benefits of mediation, including control over the outcome, as either party can refuse to sign an agreement if the process is unfair or unproductive.

Mediation is also confidential, which can protect the parties involved in the dispute from reputation damage. Organizations in a variety of industries facing countless different types of conflicts may reach the conclusion that mediation is a reasonable alternative to litigation.

Exploring every option for resolving business conflicts, such as mediation sessions, may lead to a better outcome for all involved. Executives and owners who are aware of alternative dispute resolution options can potentially select a more informed best path forward for the organizations they help operate.